The Skidmore review highlights the government’s silence on net zero

It is testament to the topsy-turviness of our recent politics that less than six months ago Chris Skidmore made headlines for becoming the first Tory MP to switch from backing Rishi Sunak to Liz Truss. Truss returned the favour by asking Skidmore – a former energy minister – to conduct a review of how to deliver net zero in a pro-business and pro-growth way. Now Skidmore’s report – which is an important contribution to the UK climate debate – has ended up on the desk of prime minister Sunak.

The review reframes the economic case for net zero leadership

Skidmore’s main argument is that net zero is “the growth opportunity of the 21st century” and current inertia means the UK risks losing out on jobs and investment. He cites a range of evidence that showing green investments could drive productivity improvements and go hand in hand with tackling other barriers to growth, such as regional inequality and low skills. Clearly, a “green big bang” won’t be enough to tackle the UK’s economic malaise. But the review is right to frame net zero as an opportunity – and to argue that it is “certainty, clarity and consistency” that will bring down the costs. 

The review’s second key message is that green technologies will be a key arena of strategic global competition: in Skidmore’s words, “if we don’t lead this, others will”. Russia’s invasion of Ukraine has brought home the risk of depending on imported fossil fuels, while the report highlights China’s dominant position in solar PV modules and EV batteries. Investing in green energy and manufacturing could provide greater security – as well as potential export markets.

These messages are intended to develop a centre-right narrative for climate action, so it will be interesting to see what response they get from the Conservative Party. Former cabinet minister, Lord Frost was quick to denounce the review’s proposals as “expensive, dirigiste and productivity-destroying”, a view that will resonate with the sceptical backbench Net Zero Scrutiny Group. But the report could also embolden the Conservative Environment Network, a larger group of over hundred backbenchers, who favour more action.

With the government increasingly vulnerable to rebellions, they may pick up on Skidmore’s biggest policy asks: to further accelerate the deployment of onshore wind (beyond the climbdown on planning reform secured in December); to boost solar energy (he calls for a “rooftop revolution”); and to accelerate the switch to heat pumps. In other areas, the review is less bold: there are several calls for policies or consultations to be brought forward by a year or two, while in transport and agriculture, it does not push for extra ambition.

Skidmore’s most important contribution is about how to drive delivery

The report offers a detailed examination of the infrastructure, governance and skills needed for delivery – precisely where the government’s 2021 strategy was lacking. It identifies the UK’s “antiquated grid” as a major barrier and calls for a range of measures including regulatory reform and investment.  

It cites IfG research identifying a lack of joined up policy making in areas like transport and housing and calls for a new Office for Net Zero Delivery to hold departments to account, unblocking issues and removing barriers to investment, as well as a strengthened role for local government. And it goes much further that the government’s strategy on skills, calling for reforms to the Apprenticeship Levy and a new programme to incentivise the training of heat pump engineers.  

Overall, the vision is of a more activist role for government – not so much in public investment (as Labour has proposed) but in setting clear direction (including over how it will make choices between different technologies) and taking action to enable the market to deliver progress. It is not clear that Skidmore’s talk of government leading “ten missions” and taking a “programmatic approach” would have landed well with Truss.  

It is now up to the government to respond

But the aim of any review is not to produce an elegant tome but to influence change – so the key question is how the government will respond.

The immediate prospects aren’t brilliant. Sunak didn’t mentioned net zero in setting out his priorities for the year – and it was absent from his earlier prognosis of how to boost economic growth. ⁴ That said, the three key areas in Sunak’s Mais Lecture, capital, technical skills and R&D, do overlap with what Skidmore sees as drivers of green growth. See www.gov.uk/government/speeches/chancellor-rishi-sunaks-mais-lecture-2022  While Boris Johnson was able to take his party with him on the green agenda after a big election victory, Sunak is in a weaker position and will find bold reforms difficult, particularly in areas like planning – although chancellor Jeremy Hunt has begun to talk more about linking the economic recovery with the green transition.

However Labour has made investing in green industries a key plank of its policy agenda, linking it levelling up and economic renewal. It was the central theme of Keir Starmer’s 2022 party conference speech, while his New Year speech similarly outlined a “mission-based” approach to driving progress. At the inaugural IfG conference, Lisa Nandy made clear that she sees net zero as a key part of Labour’s devolution agenda.

With an election approaching, the government will come under pressure to develop a distinctive approach to net zero and get the UK on track for its commitments (an updated strategy is due by March). If the prime minister is looking for inspiration, the document he has just received would be a good place to start.